The card associations want their members to feel safe while using their credit card. Given the fact that fraud happens all the time in an online market, a secure system is a major selling point. American Express has a unique approach for this reason.
AMEX differs from all other card networks because they issue their cards and deal directly with cardholders. Without a network of banks representing you, the transaction process is far more efficient. That is why AMEX chargebacks work differently than other chargebacks. Let’s take a closer look at how different American Express is to other credit card companies.
How does American Express chargeback works?
Transacting with AMEX has a lot of benefits, but also you need to understand how their chargeback system works. AMEX has some specific policies in that field so it is of the essence to be familiar with them to keep your business intact.
Customers will naturally raise a dispute if they receive a faulty item or a completely different one from what they ordered. However, issues like delayed delivery won’t be enough of a reason for a chargeback. So like any other purchase, set the expectations on a transaction properly. Cover yourself in your terms and conditions. Don’t just say a delivery will occur at a certain date, but tell customers they can begin to expect a delivery, for example.
When you sell a product or service that your client is not satisfied with, they can register it as unrecognized. By doing that your client is starting a dispute which Amex needs to further investigate. The client then sends evidence that American Express looks at, and if valid, they can create a chargeback. Bear in mind that you as a merchant can also provide evidence at this point, that can reverse the verdict of an Amex dispute.
AMEX Dispute Timelines
- Cardmembers have 120 days to file a dispute from day of the transaction.
- Once AMEX issues a chargeback for a dispute, the merchant has 20 days to respond. Failing that, the chargeback will be automatically completed.
- Cardholders can dispute a transaction no more than twice.
What is an American Express inquiry?
An inquiry is sent to the merchant or business owner after a client claims an Amex dispute charge. As it was mentioned above, the seller has 20 days to reply with compelling evidence that the transaction was valid.
As with Visa and MasterCard, keeping good records and submitting compelling evidence promptly will help you during the inquiry process. Unlike Visa and MasterCard, you can also recommend a partial refund to your customer during the inquiry. Depending on the circumstances, this may be enough to resolve a dispute then and there. After that, it is up to Amex to decide whether to chargeback the transaction.
You may not receive an inquiry before a chargeback each and every time. If a client has handed over enough evidence about the faulty transaction, the chargeback will go through immediately. Or, if a merchant processes a lot of disputes, AMEX will start issuing chargebacks by default. This will land you in a costly chargeback monitoring program. Failure to resolve persistent chargebacks will terminate your ability to process AMEX all together.
Like VISA and MasterCard, AMEX will put you on a probationary program if you process excessive chargebacks. Their policy states that they can do this at their “sole discretion”. Unlike the other card schemes, that discretion is proprietary, so there’s not a lot of public information to elaborate on. What’s important is that merchants have a contingency for when they run afoul of AMEX’s discretion. Or better yet, they should take proactive measures to avoid this altogether.
What can a merchant do to prevent chargebacks?
Always respond promptly to any problem your customer has with the order. That way you will show them that your customers’ satisfaction is important to you. Communicate your terms and conditions for each transaction, including the refund and return policies you have.
Keep your AMEX transactions secure at any given moment, by ensuring your gateway is PCI compliant. This is a vital part of any online business. Secure transactions will reduce your chargebacks. Low chargeback rates will make your sales go smoother, give your better outcomes for disputes.
The best way to deal with chargebacks, however, is to rely on ChargebackHelp! We can reduce your overall chargebacks by up to 40% and recover revenue lost to disputed transactions.
If you want to learn more about this topic, feel free to reach out to our team or click here to get your free chargeback analysis report. ChargebackHelp is here to help your business grow!